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The structure of the market for physicians' services
Health Services Research
|January 1, 1980
Summary
This study found the general practitioner market is not perfectly competitive, with high demand elasticity. Physician supply may bend backward, but this requires cautious interpretation.
Area of Science:
- Health Economics
- Physician Services Market Analysis
Background:
- Understanding the economic dynamics of general practitioner services is crucial for healthcare policy.
- Previous models often simplify the role of health insurance in physician markets.
Purpose of the Study:
- To derive and test structural equations for the supply and demand of general practitioners' services.
- To analyze the impact of health insurance specifications on physician market dynamics.
Main Methods:
- Development of structural equations for supply and demand.
- Empirical testing using data from the American Medical Association's Eighth Periodic Survey of Physicians (PSP8).
- Estimation of market competitiveness and demand elasticities.
Main Results:
- Rejection of the perfectly competitive market hypothesis for general practitioners.
- Indication of high elasticities of demand for physician services.
- Evidence supporting a "backward bending" supply curve for physicians' services.
Conclusions:
- The general practitioner market deviates from perfect competition.
- Physician service demand is highly elastic.
- The "backward bending" supply finding warrants further investigation and cautious interpretation.